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30m expect their finances to worsen over next three months

03/11/2022
PRESS RELEASE
  • Nearly one in 10 UK adults say they are struggling a lot financially
  • 31m (59%) say their finances have worsened over the past three months
  • 21m (40%) say they are worried about money
  • Retirees are more likely than other ages to say they are coping with rising bills

Research from pensions and retirement specialist LV= highlights how personal finances of millions of people are being affected by the rise in the cost of living.

The LV= Wealth and Wellbeing Monitor* ¬- a quarterly survey of 4,000 UK adults – reveals that more than half of people expect their finances to worsen over the next three months.

Respondents say their total monthly outgoings are rising; they are saving less while spending in supermarkets is rising and socialising is falling.

“Millions of people are being squeezed financially as rising energy bills, interest rates and inflation reduce their spending power. People are now more pessimistic about their finances than at any time since we started the Wealth and Wellbeing research programme in 2020.”

Clive BoltonManaging Director of Protection, Savings and Retirement at LV=

The LV= Wealth and Wellbeing Monitor reveals:

  • Worsening financial outlook: - 57% (30m) expect their finances to worsen over the next three months
  • Deterioration in finances over past three months: 59% (31m) say their finances have deteriorated over the past three months. Retirees were most likely to say there has been no real change in their finances (40% vs. 29% of 35-54 year olds)
  • Outgoings increase: 67% (35m) say their total monthly outgoings have increased over the previous three months 
  • Saving falls: 33% (18m) said the amount they are saving has fallen in the last three months
  • Supermarket spend is up, socialising down: 63% (33m) have seen an increase in their supermarket spending, while 33% (18m) are spending less money on socialising

Consumer confidence about their finances has worsened over the past 12 months

  • 9% (5m) of UK adults have described their financial situation as “struggling a lot” and this has increased each quarter over the past year (up from 5% Sept 2021)
  • 27% (14m) say they have seen a significant increase in outgoings
  • 40% (21m) say they are worried about money (28% in Sept 21)

Not all demographic groups are being affected equally by the increase in living costs. More affluent retirees appear protected from many of the worst effects of the economic crisis, due to many having a good amount of savings and having paid off their mortgages. Retirees were far more likely than other ages to say they can currently comfortably afford their day to day costs and bills. (60% of retirees said this compared to 36% of 35-54 year olds).

“The results of the latest LV= Wealth and Wellbeing Monitor highlight how the finances of millions of people are being squeezed by the large rise in the cost of living."

“Consumer sentiment had been steadily improving between spring and early autumn 2021 but has deteriorated sharply since the start of the year."

“Fortunately unemployment remains low and nearly one in five people surveyed (17%) said their income from work has increased over the past three months. However, many people are concerned that their pay is not keeping pace with rising prices."

“The result is that a third of people (33%) say they are now saving less, one in 10 are saving less into a pension while over 60% are spending more at the supermarket.”

Clive BoltonManaging Director of Protection, Savings & Retirement

The LV= Wealth and Wellbeing Indices:

Calculations show a 25 year old investing £100 per month plus inflation for 40 years could have a fund value of £87,300 in today’s money by the time they retire at 65.

Delaying saving until the age of 35 could produce a fund value of £58,300 in today’s money while delaying saving by an additional 10 years could result in a fund worth £34,400 in today’s money.

LV= Wealth & Wellbeing Indices Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21  Mar-22  Jun-22   Sep-22
How finances have changed in last three months -18  -18  -25    -9  -8   -11   -20   -34   -44   -52
How finances might look three years from now -6 -8   -14  -2  -1  -5  -12 
  -31  -32  -49
Total monthly outgoings -11  -10  -7 1   6   8 7  5  7   5
 Income from work  -9 2  -16  -11  14  26  39  49  49   57
 Amount saving  8  1 -1  10   2  -1  -3   -6  -13  -17
 Amount saving into pensions 1  0 -4  2   3  4  3   6  5   3
 Spend at the supermarket  27  21  13  18 16  26   36 46  43  48 
 Spend on socialising  -53  -37 -52  -47   -9  6  -2  -4 -10   -14

 

  • Finances over past three months: The index measuring people’s finances over the past three months was -52 in Sept 2022. More people say their finances have got worse over the past three months compared to June 2022 when the index was -44. The figure is the worst recorded since the Monitor started in June 2020. 
  • Financial outlook: The index measuring financial outlook for the next three months was -49 in Sept 2022 compared to -32 in June 2022. A negative index means more people think their finance will worsen over the next three months compared to those who think it will improve. The figure is the worst recorded since the Monitor started in June 2020. 
  • Income and outgoings: The index measuring income fell slightly from 7 to 5 while the index measuring outgoings rose to 57. Many more people (67%) say their outgoings have increased compared to decreased (10%).
  • Savings index: Savings sentiment has deteriorated. The index measuring saving has dropped to -17 in Sept 2022 from -13 in June 2022, indicating that people are spending more and saving less. 
  • Spending on socialising and at the supermarket: The index measuring spending at the supermarket was 48 in Sept 2022, compared to 43 in June 2022. A far greater proportion of people (63% or 33m) say their supermarket spend has increased compared to those who say it has decreased (14% or 8m).

Notes to Editors

*LV= surveyed 4,000 nationally representative UK adults via an online omnibus conducted by Opinium in September 2022
UK population stats from ONS. Total UK adult population is 52.9m UK adults (aged 18+).